A taskforce established by the ECBC to explore the role dual recourse instruments could play in long term finance in response to EC and other initiatives will go beyond its originally envisaged remit of SMEs and look at other potential collateral types, the industry body’s steering committee decided on Wednesday.

The plan to set up a taskforce on long term financing in response to moves such as a European Commission paper on long term finance and the European Central Bank’s emphasis on SMEs was announced at a plenary of the European Covered Bond Council in Vienna in late September.

Speaking at a NordLB covered bond event yesterday (Thursday), Luca Bertalot, secretary general of the ECBC-EMF, said that in response to feedback from ECBC members the decision was taken to explore the role dual recourse instruments like covered bonds might play in a wider range of areas. These areas have to be identified and discussed in the taskforce but could potentially cover collateral asset classes such as infrastructure, sustainability and energy, said Bertalot, as well as asset classes that have already been included in covered bonds but are not CRR-compliant, such as aircraft.

“The ECBC will be working to make sure the quality of the covered bond product is not diluted and to provide a centre of competence on dual recourse instruments to the European authorities involved in the long term financing debate,” said Bertalot.

The taskforce includes 19 members and will be split into five work-streams. A first, key meeting, involving Brussels officials will be held on 25 February, with the taskforce due to report to the next ECBC plenary, in Amsterdam on 26 March.

As announced in September, the ECBC has also set up a transparency taskforce.

At Wednesday’s ECBC meeting, Florian Eichert, senior covered bond analyst at Crédit Agricole, and Ralf Grossmann, head of covered bond origination at SG, were also chosen by issuer members of the steering committee to be nominated as two of four non-issuer members of the steering committee. Seven others had been put forward in the election. Eichert and Grossmann are set to replace Barclays’ Torsten Elling and Bank of America Merrill Lynch’s Alexander Batchvarov.

Bernd Volk, head of covered bond research at Deutsche Bank, had been on the steering committee after the representative he deputised for, Mauricio Noé, left Deutsche, and Volk has now been himself nominated. The other non-issuer steering committee member is Boudewijn Dierick, head of covered bond and flow ABS structuring at BNP Paribas, while SG’s Grossmann has been on the steering committee before.

The issuer representatives of two countries on the steering committee have also changed: Alex Valencia Baeza of La Caixa has taken over for Spain, from Santander’s Antonio Torío, who Valencia previously deputised for; and Per Sagbakken will replace Øyvind Birkeland, who Sagbakken will also be replacing as CEO of DNB Boligkreditt when Birkeland retires in March. Martin Rydin of Länsförsäkringar (LF) Bank and Hypotek has, like Volk, already been on the steering committee – having replaced Per Tunestam, who retired from SBAB earlier this year – but he will now be himself nominated.

The number of members of the steering committee has been reduced from 17 to 15, with Luxembourg and Portugal, as the two smallest jurisdictions previously represented on the committee, losing their seats.

All 15 steering committee appointments, for a two year term in 2015-2016, are subject to the approval of the Covered Bond & Mortgage Council (CBMC) general assembly.

Photo: Luca Bertalot speaking at the ECBC plenary; Source: Dan Taylor/ECBC